Gold's annus horribilis: Is the taper now priced in?

The gold price has suffered its largest fall in 30 years in 2013 as the US Federal Reserve begins withdrawing stimulus - but is that process now fully in the price?

With the Fed having announced an initial tapering of quantitative easing on Wednesday, gold subsequently dropped 2% and fell again to $1,185 this morning, near its lowest level for three years. That came despite the US central bank announcement being relatively dovish: the Fed also suggested rates would stay near zero until "well past the time" US unemployment falls below 6.5%. The fall, therefore, indicates just how sensitive the gold price has become to any suggestion of tightening policy. Investors backing a stronger US dollar have also had an inevitable impact, given the inverse c...